Narmada Macplast Drip Irrigation Systems Ltd Directors Report.

To

The Members

Narmada Macplast Drip Irrigation Systems Limited

Ahmedabad

Your Directors have pleasure in presenting the 25th Annual Report of the Company with the audited statements of accounts for the year ended 31st March, 2017.

1. FINANCIAL RESULTS:

(Rs. In Lacs)

Particulars For the Year For the Year
2016 17 2015 2016
Turnover & Other Income 598.33 40.75
Net Profit before Depreciation & amortization 18.64 8.50
Less: Depreciation 2.17 2.53
Net Profit /Loss Before Extra Ordinary Item 16.46 5.97
Current Tax 1.14 1.37
Net Profit for the year 15.52 4.60

2. STATE THE COMPANYS AFFAIRS AND OPERATIONS:

The Company is engaged in business of drip irrigation system. During the year, your Company has achieved a turnover and earned other income in tune of Rs. 598.33 Lacs as compare to the turnover of Rs. 40.75 Lacs recorded for the previous year and the net profit for the current year was Rs.15.52 Lacs compared to profit of Rs.4.60 Lac as recorded in the previous year.

3. CHANGE IN NATURE OF BUSINESS:

During the year under Report, there was no change in the nature of business of the Company.

4. TRANSFER TO RESERVES:

The Board of Directors does not propose to carry any amount to reserves.

5. DIVIDEND:

Your directors have not recommended any dividend.

6. FIXED DEPOSITS:

The Company neither has accepted nor invited any deposit from the public, within the meaning of section 73 of the Companies, Act, 2013 and the Rules made thereunder.

7. SHARE CAPITAL

The Authorize Share Capital of the Company is Rs. 5,00,00,000/- and Paid up Share Capital of the Company is Rs. 3,62,30,000/-.

8. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANICAL POSITION AFTER THE END OF FINANCIAL YEAR:

There are no any material changes and commitments occurred after the end of the financial year, which is affecting the financial position of the Company.

9. THE NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR:

There are no holding, subsidiaries, joint ventures or associate company of the Company. During the financial year ended on 31st March, 2017, none of the companies have become or ceased to be the subsidiaries, joint ventures or associate companies of the Company. The performance and financial position of subsidiaries, associates and joint ventures as per rule 8(1) of the Companies (Accounts) Rules, 2014 is not applicable.

10. DIRECTORS:

In accordance with the provisions of the Companies Act, 2013 and the Articles of the Association of the Company, Mr. Ketan Baldha Independent Director of the Company resigned from the company and Mr. Girish Baldha is appointed as Independent Director of the company by the board of Directors and Mrs. Daxa Vaghasia is appointment as Non-Independent and Non-Executive Director, the approval of the shareholders will be taken in the upcoming Annual General Meeting of the Company.

The board of Directors as on 31st March, 2017 is Mr. Vrajlal Vaghasia, Mr. Jiten Vaghasia, Mr. Ketan Baldha, Mr. Kantibhai Devani, Mr. Viesh Babariya and Mrs. Daxa Vaghasia.

11. ANNUAL RETURN:

The extract of Annual Return as prescribed under Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, is set out in an annexure as Annexure I to this report.

12. MEETINGS OF BOARD:

During the financial year 2016-2017, 6 (Six) Board Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

13. BOARD EVALUATION

The Board of Directors has carried out an annual evaluation of its own performance, Board Committees and individual directors based on inputs from the directors.

The Board and the Nomination and Remuneration Committee reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings. Also, the Chairman was also evaluated on the key aspects of his role.

In the separate meeting of independent directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated. The same was discussed in the Board meeting that followed the meeting of the independent directors, at which the performance of the Board, its committee and individual director was also discussed.

14. INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has adequate internal financial controls commensurate with the nature & size of business of the Company

15. DECLARATION BY INDEPENDENT DIRECTORS:

(Pursuant to Provisions of section 149(6) OF the Companies Act 2013)

All the Independent Directors of the Company do hereby declare that:

(1) All the Independent Directors of the Company are neither Managing Director, nor a Whole Time Director nor a Manager or a Nominee Director.

(2) All the Independent Directors in the opinion of the Board are persons of integrity and possesses relevant expertise and experience.

(3) Who are or were not a Promoter of the Company or its Holding or subsidiary or associate company.

(4) Who are or were not related to promoters or directors in the company, its holding, subsidiary or associate company.

(5) Who has or had no pecuniary relationship with the company, its holding, subsidiary or associate company or their promoters or directors, during the two immediately preceding financial years or during the current financial year.

(6) None of whose relatives has or had pecuniary relationship or transaction with the company, its holding, subsidiary, or associate company, or their promoters, or directors, amounting to two per cent or more of its gross turnover or total income or fifty lacs rupees or such higher amount as may be prescribed, whichever is lower, during the two immediately preceding financial years or during the current financial year,

(7) Who neither himself, nor any of his relatives,

(a) Holds or has held the position of a key managerial personnel or is or has been employee of the company or its holding, subsidiary or associate company in any of three financial years immediately preceding the financial year in which I\he is proposed to be appointed.

(b) Is or has been an employee or proprietor or a partner, in any of the three financial years immediately preceding the financial years in which he is proposed to be appointed of

(i) A firm of auditors or company secretaries in practice or cost auditors of the company or its holding, subsidiary or associate company; OR

(ii) Any legal or a consulting firm that has or had any transaction with the company, its holding, subsidiary or associate company amounting to ten per cent, or more of the gross turnover of such firm;

(iii) Holds together with his relatives two per cent, or more of the total voting power of the company; OR

(iv) Is a Chief Executive or director, by whatever name called, or any non-profit organization that receives twenty five per cent or more of its receipts from the Company, any of its promoters, directors or its holding, subsidiary or associate company or that holds two per cent or more of the total voting power of the company; OR

(v) Who possesses such other qualifications as may be prescribed.

16. DIRECTORS RESPONSIBILITY STATEMENT

In terms of section 134 Clause (C) of Sub-Section (3) of the Companies Act, 2013, in relation to financial statements for the year 2016-17, the Board of Directors state:

a) In the preparation of the annual accounts for the financial year ended 31st March 2017, as far as possible and to the extent, if any, accounting standards mentioned by the auditors in their report as not complied with, all other applicable accounting standards have been followed along with proper explanation relating to material departure;

b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and profit and loss account of the Company for that period;

c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) The Directors have prepared the annual accounts on a going concern basis; and

e) The directors in the case of a listed company had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

17. DECLARATION BY BOARD AS PER REQUIREMENT OF SECTION 178 (1)

In compliance with Section 178 (1) of the Companies Act, 2013 the Board of Directors do hereby declare that:

a. The Company has proper constitution of the Board of Directors including Independent Directors.

b. The Company has constituted Nomination and Remuneration Committee, Stakeholders Relationship Committee, Audit Committee as per requirements of provisions of the Companies Act 2013.

c. The Company has the policy for selection and appointment of independent directors who are persons of reputation in the society, have adequate educational qualification, sufficient business experience and have integrity & loyalty towards their duties.

d. Company pays managerial remuneration to its Managing/Whole Time Director.

e. The Independent Directors are not paid sitting fee for attending Board and other committee meetings held by the Board from time to time.

f. The Company is not paying any commission on net profits to any directors.

18. AUDIT COMMITTEE

The Detail pertaining to composition of audit committee, its scope and attendance of members are included in the Corporate Governance Report, which forms part of this report.

19. STATUTORY AUDITORS:

The Companies Act,2013 ("the Act") was notified effective April 1, 2014, Section 139 of the Act lays down the criteria for appointment and mandatory rotation of statutory auditors. Pursuant to section 139 of the Act and the Rules made thereunder, it is mandatory to rotate the statutory auditors on completion of two term of five consecutive years. The Rules also lay down the transitional period that can be served by the existing auditors depending on the number of consecutive years for which an audit firm has been functioning as auditor in the same company. The incumbent auditor, M/s. S.D. Mehta & Co.,(Firm registration number: 137193W) has served the Company for over 10 years before the Act was notified and will be completing the maximum number of transitional period (three year) at the ensuing 25th AGM.

The Audit committee of the company has proposed and the Board has recommended on 12th August, 2017 the appointment of M/s. Hardik Kadia & Co., Chartered Accountants (Firm Registration No. 100648W) as the statutory auditor of the company. M/s. Hardik Kadia & Co ., will hold office for a period of five consecutive years from the conclusion of the 25th Annual General Meeting of the Company till the conclusion of the 30th Annual General Meeting to be held in the calendar year 2022. The first year of audit of the financial statement will be for the year ending March 31, 2018 subject to ratification of their appointment at every Annual General Meeting, if so required under the Act

The Company has received a certificate from M/s. Hardik Kadia & Co., to the effect that their appointment, if made, shall be in compliance with the provisions of Section 139 and 141 of the Companies Act, 2013. Accordingly, the Board recommends appointment of M/s. Hardik Kadia & Co., Chartered Accountants as the statutory auditors of the Company in place of M/s. S.D. Mehta & Co., Chartered Accountants, to hold office from the conclusion of 25th AGM until the conclusion of the 30th AGM of your Company. Necessary resolution seeking approval of the members for appointment of new statutory auditors has been incorporated in the Notice convening the 25th Annual General Meeting.

20. SECRETARIAL AUDITORS:

Pursuant to the provisions of section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration personnel) Rules, 2014, the Board of Directors appointed M/s. Thakrar & Associates, Company Secretaries in Practice to conduct Secretarial Audit of the Company for Financial Year 2016-17. The Report of the Secretarial Audit Report is set out in an annexure as Annexure II to this report.

In connection, with the auditors observation in the Secretarial Audit Report, the explanation / clarifications of the Board of Directors are as under:

With regard to observations of the Secretarial Auditor for non-compliances of various provisions of the Companies Act, 2013 and Listing Regulation, it is stated that the Company is not having major operations and the management of the Company is striving hard to operative effectively and taking steps to make necessary compliances under the Companies Act, 2013 and Listing Regulation.

EXPLAINATION TO THE SECRETARIAL AUDITORS REMARKS

The Directors submit their explanations to then various observations made by the Secretarial Auditors in their report for the year 2015-16. Para nos. of Auditors Report and reply are us under:

Basis for Qualified Opinion

1. Non Appointment of Company Secretary/CFO/Internal Auditor As Company have not major operation and doesn t have sufficient funds to pay salary therefore the Company had not appointed Company Secretary/CFO/ Internal Auditor for the year ended 31st March, 2017, Nevertheless the Company has as on date appointed Company Secretary, Chief Financial Officer and Internal Auditor.
2. Not provided e-voting facilities and not published advertisement in news paper Company was unaware regarding evoting requirements, therefore Company failed to comply with e - voting requirements. Nevertheless the Company has facilitated evoting facility for the forthcoming AGM.
3. Not filed necessary e-forms as prescribed under the Companies Act, 2013 As on 31st March, 2017 company was not in situation to comply with pending requirements, Nevertheless, as on date Company has completed all pending statutory ROC compliances
4 Not submitted quarterly, half yearly and yearly compliances with the Stock Exchange as per SEBI (Listing Obligations & Disclosures Requirements) Regulations, 2015 As Board was unaware about the compliance, therefore the Board really apologize for the non-compliance, further the Board wish to inform that, as on date the Company is complying with the said requirement.
5 Not paid BSE Annual Listing Fees for the year 2016-17. As the company is in revocation procedure the same fees will be paid once the procedure complete.

21. PARTICULARS OF EMPLOYEES:

The particulars of employees in accordance with the provisions of Section 197 of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of

Managerial Personnel) Rules, 2014, is set out in an Annexure IV to this report.

The particulars of employees falling under the purview of Section 197 read with Rule 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are - NIL.

22. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

Details of Loan, Guarantee and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

23. RELATED PARTY TRANSACTIONS:

All the transactions entered into with related parties as defined under the Companies Act, 2013 and the Listing Regulation, if any, during the year were on an arm s length price basis and in the ordinary course of business. Such transactions have been approved by the Audit Committee. The Board of Directors of the Company has formulated the Policy on Related Party Transactions.

During the Financial Year 2016-17, the Company did not have any material pecuniary relationship or transactions with Non-Executive Directors. In the preparation of financial statements, the Company has followed the Accounting Standards. The significant accounting policies which are applied have been set out in the Notes to Financial Statements. The Board has received disclosures from Key Managerial Personnel, relating to material, financial and commercial transactions where they and/or their relatives have personal interest. There are no materially significant related party transactions which have potential conflict with the interest of the Company at large.

24. CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION:

1. Conservation of Energy : NA
2. Technology Absorption : NIL
3. Foreign Exchange Earning and Outgo : NIL

25. CORPORATE GOVERNANCE:

The Board of Directors of the Company have evolved and adopted a Code of Conduct based on the principles of Corporate Governance and best management practices being followed globally.

Compliance Report, in accordance with the Regulation 27 of the Listing Regulation with Stock

Exchanges, on Corporate Governance forms part of the Annual Report. The Auditors Certificate on the compliance of Corporate Governance Code embodied in Listing Obligation and Disclosure Requirement Regulation, 2015 of the SEBI attached hereto and forms part of this Report.

26. MANAGEMENT DISCUSSION AND ANALYSIS:

Pursuant to Listing Obligation and Disclosure Requirement Regulation, 2015 of the SEBI, Management Discussion and Analysis Report are annexed herewith and form part of this Report.

27. CORPORATE SOCIAL RESPONSIBILITY(CSR) COMMITTEE:

The provisions for Corporate Social Responsibility Committee and Corporate Social Responsibility activities are not applicable to the Company.

28. ESTABLISHMENT OF VIGIL MECHANISM:

The Company promotes ethical behavior in all its business activities and has put in place a mechanism for reporting illegal or unethical behavior. The Company has adopted a Whistle-Blower Policy/ Vigil mechanism, which provides a formal mechanism for all employees of the Company to make protected disclosures to the Management about unethical behavior, actual or suspected fraud or violation of the Company s Code of Conduct. Disclosures reported are addressed in the manner and within the time frames prescribed in the Policy. During the year under review, no employee of the Company has been denied access to the Audit Committee.

29. BOARD COMMITTEE:

The Board of Directors of your Company had already constituted various Committees in compliance with the provisions of the Companies Act, 2013 and / or Listing Regulation viz. Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee. During the year under review, in compliance with the Listing Regulations.

All decisions pertaining to the constitution of Committees, appointment of members and fixing of terms of reference / role of the Committee are taken by the Board of Directors.

Details of the role and composition of these Committees, including the number of meetings held during the financial year and attendance at meetings, are provided in the Corporate Governance Section of the Annual Report.

30. INDEPENDENT DIRECTORS MEETING:

During the year under review, the Independent Directors of the Company met on 14th February, 2017, inter alia to discuss:

i) Evaluation of Performance of Non-Independent Directors and the Board of Directors of the Company as a whole.

ii) Evaluation of performance of the Chairman and / or Managing Director of the Company, taking into views of Executive and Non-executive Directors.

iii) Evaluation of the quality, content and timelines of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform its duties.

31. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION:

Your Companys policy on Directors appointment and remuneration and other matters provided in Section 178(3) of the Companies Act, 2013 is set out in an annexure as Annexure III to this report.

32. RISK MANAGEMENT POLICY:

The Board reviews the risks associated with the Company every year while considering the business plan. Considering the size of the Company and its activities, it is felt that the development and implementation of a Risk management policy is not relevant to the Company and in the opinion of the Board there are no risks which may threaten the existence of the Company.

33. SEXUAL HARASSMENT POLICY:

The Company has in place a Prevention of Sexual Harassment policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

During the year 2016-2017, no complaints were received by the Company related to sexual harassment.

34. APPRECIATION:

Your Directors wish to place on record their sincere appreciation and gratitude for the valuable support and co-operation received from the Customers and Suppliers, various Financial Institutions, Banks, Government Authorities, Auditors and Shareholders during the year under review. Your Directors wish to place on record their deep sense of appreciation for the devoted services of the Executives, Staff and Workers of the Company for its success.

ON BEHALF OF THE BOARD

For Narmada Macplast Drip Irrigation Systems Limited

VRAJLAL VAGHASIA JITEN VAGHASIA
MANAGING DIRECTOR WHOLE TIME DIRECTOR
DIN - 02442762 DIN - 02433557
Date: 12th August, 2017
Place: Ahmedabad